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Why Is Abercrombie (ANF) Down 7.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Abercrombie & Fitch (ANF - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Abercrombie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Abercrombie's Q2 Earnings Beat on Tariff Refunds
Abercrombie delivered second-quarter fiscal 2026 results that topped expectations. It reported earnings per share (EPS) of $2.42 (Excluding IEEPA Tariffs) and adjusted EPS of $4.17. The Zacks Consensus Estimate is pegged at $1.95. Revenues rose 4.8% year over year to $1.27 billion, beating the consensus estimate of $1.24 billion by 1.9%.
The quarter benefited from record net sales, broad-based regional growth and a strong operating performance. Comparable sales were flat on a constant-currency basis, while both Abercrombie and Hollister brands posted record second-quarter sales.
ANF's Record Sales Drive Growth
Abercrombie reported net sales of $1.27 billion in the second quarter of fiscal 2026, up 5% year over year. The company marked its 15th consecutive quarter of growth, supported by higher sales across regions and brands.
The Americas remained the largest contributor, with sales increasing 5% year over year to $1.02 billion and comparable sales rising 1%. APAC sales climbed 19% to $44.2 million, with comparable sales up 13%, while EMEA sales grew 2% to $202 million despite comparable sales declining 4%.
Abercrombie Brands Lead Portfolio Gains
Abercrombie brand generated net sales of $596.8 million, up 8% year over year, with comparable sales increasing 4%. Hollister sales reached $669.9 million, up 2%, although comparable sales declined 3%. We had expected sales to rise 2.1% year over year to $563.7 million for Abercrombie and 4% to $683.1 million for Hollister.
The brand performance highlighted continued strength in the company’s core lifestyle offerings. Management noted that both brands achieved record second-quarter net sales, with Abercrombie brands leading overall growth.
ANF Expands Margins With Refund Benefit
ANF posted adjusted operating income of $252.7 million, up 50.3% from the year-ago quarter. Adjusted operating margin improved to 19.9% from 13.9%. The company benefited from approximately $100 million of IEEPA tariff refunds, which reduced cost of sales and supported profitability.
Selling expense increased to $444 million, up 18.3% from the year-ago quarter, while general and administrative expense rose to $204.8 million, up 16.8% from the year-ago quarter. Higher investments in stores, marketing and payroll partially offset the benefit from stronger sales and tariff refunds.
ANF Maintains Strong Financial Flexibility
ANF ended the quarter with cash and equivalents of $627.7 million and total liquidity of approximately $1.1 billion, including available borrowing capacity under its ABL facility. Inventory stood at $591.7 million compared with $593 million in the prior-year period.
The company continued returning capital to shareholders, repurchasing 2 million shares for approximately $177 million during the quarter. Year to date, ANF repurchased 3.2 million shares for $282 million, reducing shares outstanding by 7% from the beginning of the year.
Abercrombie Raises Fiscal 2026 Outlook
Abercrombie raised its fiscal 2026 outlook, now expecting net sales growth of around 5% compared with the prior forecast of 3-5%. The company also increased its operating margin outlook to 14.5-15% from 12-12.5%.
For the fiscal year, ANF expects net income per diluted share of $13.10-$13.60 and share repurchases of at least $500 million. Capital expenditures are projected at around $250 million, while the company continues to plan approximately 30 net store openings, 80 remodels and rightsizes, and 20 closures.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 7.62% due to these changes.
VGM Scores
At this time, Abercrombie has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Abercrombie has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
View the Zacks #1 Rank List
Image: Bigstock
Why Is Abercrombie (ANF) Down 7.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Abercrombie & Fitch (ANF - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Abercrombie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Abercrombie's Q2 Earnings Beat on Tariff Refunds
Abercrombie delivered second-quarter fiscal 2026 results that topped expectations. It reported earnings per share (EPS) of $2.42 (Excluding IEEPA Tariffs) and adjusted EPS of $4.17. The Zacks Consensus Estimate is pegged at $1.95. Revenues rose 4.8% year over year to $1.27 billion, beating the consensus estimate of $1.24 billion by 1.9%.
The quarter benefited from record net sales, broad-based regional growth and a strong operating performance. Comparable sales were flat on a constant-currency basis, while both Abercrombie and Hollister brands posted record second-quarter sales.
ANF's Record Sales Drive Growth
Abercrombie reported net sales of $1.27 billion in the second quarter of fiscal 2026, up 5% year over year. The company marked its 15th consecutive quarter of growth, supported by higher sales across regions and brands.
The Americas remained the largest contributor, with sales increasing 5% year over year to $1.02 billion and comparable sales rising 1%. APAC sales climbed 19% to $44.2 million, with comparable sales up 13%, while EMEA sales grew 2% to $202 million despite comparable sales declining 4%.
Abercrombie Brands Lead Portfolio Gains
Abercrombie brand generated net sales of $596.8 million, up 8% year over year, with comparable sales increasing 4%. Hollister sales reached $669.9 million, up 2%, although comparable sales declined 3%. We had expected sales to rise 2.1% year over year to $563.7 million for Abercrombie and 4% to $683.1 million for Hollister.
The brand performance highlighted continued strength in the company’s core lifestyle offerings. Management noted that both brands achieved record second-quarter net sales, with Abercrombie brands leading overall growth.
ANF Expands Margins With Refund Benefit
ANF posted adjusted operating income of $252.7 million, up 50.3% from the year-ago quarter. Adjusted operating margin improved to 19.9% from 13.9%. The company benefited from approximately $100 million of IEEPA tariff refunds, which reduced cost of sales and supported profitability.
Selling expense increased to $444 million, up 18.3% from the year-ago quarter, while general and administrative expense rose to $204.8 million, up 16.8% from the year-ago quarter. Higher investments in stores, marketing and payroll partially offset the benefit from stronger sales and tariff refunds.
ANF Maintains Strong Financial Flexibility
ANF ended the quarter with cash and equivalents of $627.7 million and total liquidity of approximately $1.1 billion, including available borrowing capacity under its ABL facility. Inventory stood at $591.7 million compared with $593 million in the prior-year period.
The company continued returning capital to shareholders, repurchasing 2 million shares for approximately $177 million during the quarter. Year to date, ANF repurchased 3.2 million shares for $282 million, reducing shares outstanding by 7% from the beginning of the year.
Abercrombie Raises Fiscal 2026 Outlook
Abercrombie raised its fiscal 2026 outlook, now expecting net sales growth of around 5% compared with the prior forecast of 3-5%. The company also increased its operating margin outlook to 14.5-15% from 12-12.5%.
For the fiscal year, ANF expects net income per diluted share of $13.10-$13.60 and share repurchases of at least $500 million. Capital expenditures are projected at around $250 million, while the company continues to plan approximately 30 net store openings, 80 remodels and rightsizes, and 20 closures.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 7.62% due to these changes.
VGM Scores
At this time, Abercrombie has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Abercrombie has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.